Belzberg Reports Fourth Quarter and Annual 2010 Financial Results

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Belzberg Technologies Inc.

Mar 22, 2011, 09:00 ET

TORONTO, March 22 /PRNewswire-FirstCall/ - Belzberg Technologies Inc. (TSX: BLZ), a provider of technology and trading services, today announced its financial results for the three and twelve months ended December 31, 2010.

Net revenues for the fourth quarter decreased 28% to $3.6 million versus $5.0 million in the same year-ago period. The net loss for the fourth quarter was $2.0 million as compared to a net loss of $10.9 million (including unusual non-cash charges of $7.5 million and restructuring charges of $0.8 million) in the same quarter last year.  Diluted loss per share for the fourth quarter was $(0.14).  This compared to a loss of $(0.74) per share including $(0.56) related to restructuring and unusual non-cash charges in the same year-ago period.

The Company's financial position included cash and cash equivalents of $8.3 million and working capital of $10.3 million at December 31, 2010.

         
Financial Highlights Three months ended  Twelve months ended 
(in millions of dollars, except per share data) December 31,  December 31, 
(Three month periods unaudited) 2010 2009 2010 2009
         
Total revenue   $           3.3  $            7.9  $                  16.5  $             38.2
Net revenue  $           3.6  $            5.0  $                  15.0  $             23.1
Net loss  $          (2.0)  $         (10.9)  $                   (7.5)  $           (16.5)
Diluted loss per share  $        (0.14)  $         (0.74)  $                 (0.51)  $           (1.11)
         

On February 23, 2011 Belzberg announced a change in its strategic direction to refocus on its technology business. At the same time, Belzberg announced a definitive agreement to merge with Frontline Technologies Corporation ("Frontline") through an acquisition of Frontline by Belzberg. The Frontline transaction is expected to close in the second quarter of 2011 and is subject to customary closing conditions, including all necessary regulatory and stock exchange approvals and approval by the shareholders of Belzberg.

As part of this new strategic direction, Belzberg announced that it had entered into an agreement to refer most of the clients of its US execution businesses to the ConvergEx Group.  It is Belzberg's intention to pay a special distribution to the holders of its existing common shares within a year of the closing of the Frontline transaction.  Shareholders are invited to review the Management Information Circular, dated March 11, 2010 for additional information related to these announcements.

About Belzberg Technologies

Belzberg Technologies Inc. is a provider of trading technology and technology-based brokerage services for equities and options.  Using Belzberg's suite of integrated trading tools and network connectivity, Belzberg's customers have direct access to all major North American markets. Belzberg Technologies is listed on the Toronto Stock Exchange (Ticker-BLZ) - additional information is available at www.belzberg.com.

Forward looking statement disclaimer

Except for historical information contained herein, the matters discussed in this press release are based on forward-looking statements that involve risk and uncertainty. A variety of important factors could cause results to differ materially from such statements, including but not limited to economic, competitive, governmental and technological factors affecting the company's operation, markets, products, prices and other factors.

       
BELZBERG TECHNOLOGIES INC.
Consolidated Balance Sheets
(in thousands of Canadian dollars)
      
          December 31,   December 31,
          2010   2009
          (Audited)   (Audited)
               
ASSETS        
CURRENT      
  Cash and cash equivalents    $          8,319    $        15,670
  Cash and cash equivalents segregated under regulations and other              2,143                2,805
  Cash and cash equivalents on deposit with clearing and depository organizations 1,630   1,363
  Receivable from brokers, dealers and clearing organizations                     168                  947
  Accounts receivable               1,718                2,405
  Prepaid expenses and other receivables                  346                  468
  Securities borrowed              6,186                    -
  Income taxes receivable                  -                    12
                     20,510              23,670
CAPITAL ASSETS                 1,096                2,233
               
INVESTMENT                   30                    30
               
INVESTMENT TAX CREDITS RECOVERABLE                    -                  147
               
OTHER INTANGIBLE ASSETS, NET                           77                  141
           $        21,713    $        26,221
LIABILITIES      
CURRENT      
  Accounts payable and accrued liabilities    $          2,336    $          5,176
  Payable to customers and correspondents               1,733                1,948
  Payable to brokers, dealers and clearing organizations                       -                  345
  Securities loaned                    6,186                    -
                     10,255                7,469
SHAREHOLDERS' EQUITY      
               
CAPITAL STOCK             23,612              23,754
               
CONTRIBUTED SURPLUS               4,391                4,044
               
DEFICIT            (16,545)              (9,046)
                     11,458              18,752
           $        21,713    $        26,221
       

 

BELZBERG TECHNOLOGIES INC.
Consolidated Statements of Operations and Retained Earnings (Deficit)
(in thousands of Canadian dollars, except per share amounts)
(Three month periods unaudited)             		 
  Three months ended December 31,    Twelve months ended December 31,
  2010   2009   2010   2009
REVENUE              
  Equity order flow and clearing  $                 497    $               4,353    $              4,930    $             21,032
  Options and futures contracts                  1,724                     2,192                    6,956                   10,815
  Subscription fees                     770                     1,075                    3,349                     4,907
  Other revenue                     310                        322                    1,306                     1,457
                   3,301                     7,942                  16,541                   38,211
  Cost of exchange and clearance fees                     341                   (2,916)                   (1,491)                 (15,097)
TOTAL NET REVENUE                  3,642                     5,026                  15,050                   23,114
               
EXPENSES              
  Compensation and related benefits                  2,097                     2,881                    8,891                   12,824
  Telecommunication and datafeed services                  1,475                     1,842                    6,299                     7,774
  Administrative and other expenses                     790                     1,121                    3,023                     4,235
  Brokerage fees                     621                        840                    2,223                     3,144
  Amortization of capital assets                       335                        463                    1,550                     2,042
  Amortization of intangible assets                         24                          37                       124                        202
                   5,342                     7,184                  22,110                   30,221
               
LOSS BEFORE THE UNDERNOTED                      (1,700)                   (2,158)                   (7,060)                   (7,107)
               
  Restructuring expenses                         -                        819                      (221)                     1,658
  Government assistance                     -                     1,390                        (11)                     1,295
  Impairment of goodwill and intangible assets                        -                     1,745                       -                     1,745
  Foreign exchange loss                      375                        355                       666                     2,087
  Interest expense                         3                            3                         10                          25
  Interest income                        (1)                        (22)                          (5)                      (193)
                      377                     4,290                       439                     6,617
               
LOSS BEFORE INCOME TAXES                    (2,077)                   (6,448)                   (7,499)                 (13,724)
               
PROVISION FOR INCOME TAXES              
  Current                       -                        149                       -                        149
  Future                       -                     4,304                       -                     2,607
                      -                     4,453                       -                     2,756
               
NET LOSS                   (2,077)                 (10,901)                   (7,499)                 (16,480)
               
RETAINED EARNINGS (DEFICIT), BEGINNING OF PERIOD               (14,468)                     1,855                   (9,046)                     7,434
               
DEFICIT, END OF PERIOD               (16,545)                   (9,046)                 (16,545)                   (9,046)
               
LOSS PER SHARE:               
  Basic     $               (0.14)    $               (0.74)    $               (0.51)    $               (1.11)
  Diluted    $               (0.14)    $               (0.74)    $               (0.51)    $               (1.11)
                       
WEIGHTED AVERAGE NUMBER OF COMMON AND
COMMON EQUIVALENT SHARES OUTSTANDING
(in thousands) 		             
  Basic                   14,638                   14,797                  14,647                   14,820
  Diluted                  14,638                   14,797                  14,647                   14,820
                 

 

BELZBERG TECHNOLOGIES INC.
Consolidated Statements of Cash Flows
(in thousands of Canadian dollars)
(Three month periods unaudited) 		             
   Three months ended December 31,    Twelve months ended December 31,
          2010   2009   2010   2009
                       
CASH PROVIDED BY (USED FOR)                                      
OPERATING ACTIVITIES              
  Net earnings (loss) $             (2,077)   $           (10,901)   $             (7,499)   $           (16,480)
  Items not affecting cash              
    Amortization of capital assets                     335                       463                    1,550                    2,042
    Amortization of intangible assets                       24                         37                       124                       202
    Impairment of goodwill and intangible assets                     -                     1,745                       -                     1,745
    Unrealized foreign exchange loss (gain)                     283                       177                       550                    1,628
    Gain on sale of investment                         -                       -                        -                          (5)
    Stock-based compensation                            63                         61                       272                       279
    Future income taxes                         -                     4,341                       -                     3,045
  Changes in non-cash working capital items                   1,411                    7,175                  (1,258)                    6,430
                                39                      3,098                   (6,261)                    (1,114)
                       
INVESTING ACTIVITIES              
  Purchase of capital assets                    (190)                       (49)                      (413)                      (949)
  Purchase of intangibles                           (60)                       -                         (60)                          (7)
  Purchase of investment                            -                        -                         -                           (2)
  Proceeds from sale of investment                           -                        -                         -                          15
                             (250)                        (49)                      (473)                      (943)
                       
FINANCING ACTIVITIES              
  Repurchase of common shares                      -                         (65)                        (67)                        (97)
               
Effect of exchange rate changes on cash and cash equivalents                    (283)                      (177)                      (550)                   (1,628)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                    (494)                    2,807                   (7,351)                   (3,782)
               
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                  8,813                  12,863                  15,670                  19,452
CASH AND CASH EQUIVALENTS, END OF PERIOD  $              8,319    $            15,670    $              8,319    $            15,670
                       
CASH AND CASH EQUIVALENTS:              
  Cash      $              2,783      $              3,795    $              2,783      $              3,795
  Cash equivalents                  5,536                    11,875                    5,536                    11,875
           $              8,319      $            15,670    $              8,319      $            15,670
         
           

SOURCE Belzberg Technologies Inc.